Summary

The United States federal and state courts have approved the highest number of securities class action settlements since 2010, while the new prososed Securities and Exchange Commission chair is grilled by the Senate in confirmation hearings.

The US court system noted 85 approved settlements in 2016, five more than in 2015, according to figures cited in a recent report, Securities Class Action Settlements—2016 Review and Analysis. The USD 6 billion of approved settlements was nearly double the total settlement value in 2015, while the number of claims showed a substantial increase previous years, from 2011 through 2014.

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Stanford Law School professor, Joseph Grundfest, said the data emphasised “the importance of mega cases and mega settlements, often concentrated in industries with large market capitalisation components, like pharmaceuticals and finance.”

He added: “Class action securities fraud litigation is a hit-driven business in which a small number of cases regularly account for the lion’s share of claimant recoveries.”